The Intro to Relationship Invoicing contains pre-requisite information for this section.
This article discusses Relationship Invoicing, which is a new, opt-in feature for new sites. It is a replacement that unifies both Statements (automatic collection) and Invoices from "Invoice Billing" (manual collection).
Invoice Consolidation is a feature of Relationship Invoicing where multiple subscriptions can be combined onto a single invoice paid in a single transaction. Chargify has long been able to handle multiple concurrent subscriptions for the same customer. But each subscription would be billed separately, resulting in multiple transactions on the customers card and multiple transaction fees for you. Invoice Consolidation improves the experience for your customers with multiple subscriptions.
In order to consolidate invoices, you must first group your subscriptions so we know which to invoice together.
Each subscription group may contain up to 10 subscriptions. Every group has a primary subscription and up to 9 member subscriptions.
The primary subscription controls several functions on behalf of the group. The primary subscription controls:
- The timing of the issuance of the consolidated invoice. The consolidated invoice is issued within an hour of the renewal of the primary subscription. (See Consolidated Invoice Timing)
- The collection method (automatic vs. remittance) is controlled by the primary subscription.
- The payment method for the consolidated invoice (credit card, ACH, or other) is inherited from the primary subscription.
- Dunning is performed from the perspective of the primary subscription.
Here are some other considerations and restrictions for your subscription groups:
- A subscription may be a part of only one group at a time
- Subscriptions need not have the same renewal date (see Consolidated Invoice Timing, below)
- All subscriptions in a group must belong to the same customer. (This restriction will be relaxed over time with the release of new features.)
See How To Create Subscription Groups below for more.
Each subscription in the group still generates an “invoice segment” at signup and renewal. This segment looks like a normal invoice except that it never becomes available for direct payment. It is listed in the invoice history for the individual subscription so you can get a sense for the historical billings of the subscription. But, it may only be paid and viewed publicly (i.e. by the customer) via the consolidated invoice which contains it.
The consolidated invoice rolls up the invoice segments into a presentation that reveals the individual subscription totals but emphasizes the grand total of the consolidation.
Since subscriptions need not renew at the same time in order to be consolidated, it is important to understand how the timing rules work.
The first subscription in the group (either primary or member) to encounter normal periodic billing generates a pending consolidated invoice. As other subscriptions in the group renew, their invoice segments are added to that pending consolidated invoice. This invoice remains pending until a maximum of one hour after the primary subscription encounters periodic billing. As soon as the primary subscription renews, it attempts to detect if any member subscriptions will renew within the one hour grace period. If any grace-period renewals are detected, the consolidated invoice will wait for those renewals before beginning the “finalization” process. If no grace-period renewals are detected, the finalization process will begin immediately.
During the finalization process, the pending consolidated invoice is issued for payment. If the primary subscription is configured for Automatic Collection, payment will be collected as well.
In practice, this workflow means that if all subscriptions in the group have monthly renewals, then each subscription will contribute exactly one invoice segment per consolidated invoice.
Subscriptions with different renewal frequencies may be combined. However, you must ensure that the quickest renewal is the primary so as to minimize the time between pending invoice generation an issuance. For example, if you wish to combine monthly and annual subscriptions, make sure your primary is a monthly subscription. This way, 1 out of 12 of your monthly invoices will contain the renewal from the annual subscription.
At this time, it is up to you to align your renewal dates, if that is important to you. In other words, a member subscription that renews on January 1st will remain unpaid until the renewal date of the primary subscirption, which could be January 31st. You can use Chargify’s features to alter your billing dates as necessary. However, invoice consolidation works perfectly well even when your renewal dates are not aligned - “early” renewals just remain pending until the primary subscription renews and the consolidated invoice is issued.
Tip: to create new subscriptions that consolidate together from the beginning, create the subscriptions with a future billing date (perhaps a few minutes in the future), then consolidate them, then allow them to renew.
Chargify dunning works in conjunction with consolidated invoices marked for automatic payment:
- When payment fails, dunning rules are followed for the primary subscription, but attempts are made to collect on the consolidation grand total.
- The customer will receive only one dunning email.
- All subscriptions in the group will transition to the same dunning state of “past due”.
- If dunning fails, all subscriptions in the group transition to the same failed state (“canceled”), and the consolidated invoice is canceled as well.
- If payment is collected, all subscriptions in the group transition back to “active”.
To create a subscription group, you must nominate a subscription as the primary. To do this, locate the subscription and then click “Create Subscription Group” from the “Subscription Actions” dropdown.
Alternatively, you may create the group from the “Actions” dropdown in the subscriptions listing.
Once you have created a group, you may view the group by choosing “View Subscription Group” from the same places (the “Subscription Actions” dropdown on a single subscription or the “Actions” dropdown on the subscription listing.) Alternatively, you may click the blue “Group - Primary” label from the subscription to access the group page.
From the group screen, you can:
- View the subscriptions in the group (both primary and member)
- View the consolidated invoices generated by the group
- Manage the group to add or remove members
Two more options for adding subscriptions to groups are on the way. First, you will soon be able to create a new subscription into a group, both in the UI and API. Second, you will soon be able to create several subscriptions at once as part of a group from the beginning, both in the UI and API.
On the group screen, choose “Manage Group” to add or remove members subscriptions.
Under “Available Subscriptions”, you will see the other subscriptions for the same customer that are not yet in a group. Choose one or several to “Add”. You may also select one or more subscriptions to “Remove”. When complete, choose “Update Susbcription Group” to lock in your group configuration.
Nothing happens immediately when you add or remove a subscription from the group. At the next scheduled renewal for the subscription, the subscriptions in the group will contribute to the consolidated invoice with an invoice segment.
Consolidated invoices may be accessed from one of two places:
- On the group screen under “Invoices”, where all of the consolidated invoices for the group are listed.
- On the global invoice listing, where all of your consolidated and normal invoices are listed (invoice segments are not shown here)
From a single subscription’s invoice listing, you may only access normal (non-consolidated) invoices and invoice segments, since consoildated invoices are not for a single subscription.